Investor StrategyStockTop News

Exclusive: Retailers start to cancel vendor orders following coronavirus hit

3 Mins read

(C) Reuters. FILE PHOTO: The sign outside a Ross store is seen in Broomfield, Colorado

By Melissa Fares

NEW YORK (Reuters) – After closing stores around the world to curb the spread of the coronavirus, retailers are now telling some vendors to immediately cancel orders.

On Thursday, discount store operator Ross Stores Inc (O:ROST) sent a letter to its vendors, notifying them it would cancel all merchandise purchase orders through June 18 due to the impact the novel coronavirus has had on its business.

“This is the first time in our history that we are unable to deliver exceptional merchandise to our customers,” the memo, which was reviewed by Reuters, reads.

The Dublin, California-based discount store operator said it would also extend payment terms on all existing merchandise payables by 90 days.

A company spokesperson was not immediately available for comment.

Paul Rotstein, President and Chief Executive of Gold Medal International of New York City, which supplies accessories like socks and gloves to Ross Stores, said other retailers are making similar moves.

“We’ve had pretty much 100% cancellation from all major retailers,” he said, naming Macy’s Inc (N:M), Nordstrom Inc (N:JWN), TJX Companies Inc (N:TJX), and Burlington Coat Factory (UL:BCF) among his customers who have pressed pause on orders.

Macy’s said on its website on Wednesday that the heavy toll from coronavirus is forcing it to freeze both hiring and spending, reducing receipts and extending the terms for payment of all goods and services.

The three other retailers were not available for comment.

“I’ve been doing this 38 years – this doesn’t compare to anything I’ve experienced,” Rotstein said. “Just the loss of income, I mean, I think we’re looking at no income for at least 8 weeks.”

More than 470,800 people have been infected by the coronavirus across the world and over 21,200 have died, according to a Reuters tally. Earlier in the day, the U.S. government reported that the number of Americans filing claims for unemployment benefits surged to a record of more than 3 million last week, as strict measures to contain the coronavirus pandemic brought the country to a sudden halt.

Rotstein said that some retailers are asking him to “just pause maybe another week or two to try and figure out what the receipts are going to look like in the third and fourth quarter.”

Last week, many government officials ordered all non-essential businesses to close in hopes of reigning in the spread of the virus, forcing retailers to dangle steep online discounts on clothing, shoes and accessories.

Some are ceasing online operations, too.

Shoppers searching TJX’s, and are directed to a statement from Ernie Herrman, CEO and President of The TJX Companies, alerting them that the retailer’s thousands of store operations have been closed globally to reduce the spread of the virus.

“The company is also temporarily closing its online businesses, and during this time, as well as its distribution and fulfillment centers and offices, with associates working remotely when they can,” Herrman said.

Yoox (MI:YNAP) Net-a-Porter, which sells designer clothes, shoes, bags, and accessories online, notified customers visiting its U.S. site that it closed its warehouse “in line with local government guidelines, and for the health and safety of our community.”

UK shoe retailer Schuh said on Thursday it had decided to close its online site as well as its stores to keep its staff, customers and community safe.

For some, demand online “has picked up, but it hasn’t picked up nearly as much as the loss of the brick-and-mortar” sales, said Steve Sadove, a senior adviser for Mastercard (NYSE:MA) and former CEO and chairman of Saks Fifth Avenue.

Europe’s biggest pure online fashion retailer Zalando said on Wednesday that restrictions on public life were hitting demand. A spokeswoman said demand for athleisure and gear for yoga and running has risen as people are forced to work – and exercise – at home.

Exclusive: Retailers start to cancel vendor orders following coronavirus hit

Related posts
Market OverviewTop News

No parties, no problem: Introverts don't mind sheltering at home

3 Mins read
5/5 (C) Reuters. Burrell and husband Seifert, whose home-based business has been shuttered, at their home in Seattle 2/5 By Sharon Bernstein…
Market OverviewTop News

It's April in Paris, but French told to stay indoors

2 Mins read
World4 hours ago (Apr 05, 2020 08:20AM ET) 3/3 (C) Reuters. FILE PHOTO: An aerial view of deserted Paris during coronavirus disease…
Market OverviewTop News

Olive branches handed out on Palm Sunday in near-deserted Jerusalem

1 Mins read
World4 hours ago (Apr 05, 2020 08:16AM ET) 4/4 (C) Reuters. A man prays in front of the closed doors of the…
Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us and our affiliates. Remember that you can opt-out any time, we hate spam too!

Leave a Reply

Your email address will not be published. Required fields are marked *